Tag Archives: debt free

While you may not have gotten a raise, you can still save more money if you introduce smart saving habits into your daily lifestyle. Being able to save really just means you take a closer look at the ways you manage and spend your money, then find avenues for putting cash away. Creating rules to follow and developing smart habits will change the way you think about your cash flow, and can be a great way to trick yourself into saving more money.

Use Cash

Striving to use only cash will cause you to force yourself to pay closer attention to how much money you really spend every time you go out, to the grocery store or clothes shopping. The trick is to put your plastic away so you feel like you don’t even have it to use. You may also want to consider removing your credit cards from easy pay and 1-Click settings from your online accounts to make it harder to make purchases. You might be surprised at how much less you want an item you see online when the added difficulty of typing in your 16-digit credit card number is in your way.

Check Your Credit Card Statement Every Month

Your credit usage may have run away from you because you are like the thousands of other people who do not check their credit card statement every month. Looking at how much money you spend and the places you spend it is a good way to make yourself think about your choices in a more deliberate manner. Seeing that you spent $80 at the bar instead of the $40 you planned may shock you into being a little more careful next weekend, or realizing you spend half of your paycheck on new threads may encourage you to create a budget for your wardrobe.

Good Things Come to Those Who Wait

Attorney Leslie Tayne who writes for Fox Businesses advises you wait five days before making a big purchase. While that hot tub sale is enticing, give yourself five days to ponder whether a hot tub purchase is really in line with saving for your kids’ college tuition. Thinking about what you want to buy is a great way to prevent yourself from spending too lavishly on items you don’t need. A bonus benefit of waiting to buy something is that it gives you a chance to find a better deal, whether you look online or in competitors’ stores.

Ignore Extra Income

Even though your surprise income may look like it has “jet-ski” written all over it, try instead to imagine it saying “Save me!” and put it away into an account you don’t use immediately. Tayne advises that you only rely on the money you make regularly to make big purchases. That means you should take that big fat tax refund or even the $10 you found in the parking lot and put it toward debt or into a savings account. Extra income is anything outside of the realm of your weekly or monthly income, including cash you make from selling your unneeded wares, (like diamonds that you sell with us!) By putting that extra cash away, you’ll never be tempted to dump it down the drain on something you don’t need. The unexpected kind of money is best spent by not spending it at all.

Automate Everything

Investopedia advises against taking care of your financial business on a day-by-day basis. Instead, get your employer to deposit portions of your paycheck not only into your checking account, but into your savings account and IRA as well. In addition, set up your credit cards to pay off the balance each month, not just the minimum. A penny paid off is a penny and a half earned in the credit world, because each time your balance equals zero, that means you don’t have to pay annoying off bank fees later in life.

Saving money is really just about changing the way you look at money. If you don’t let it burn a hole in your pocket and instead let it burn a hole in your debt or build your savings, you’ll be on your way to securing a bright financial future in no time.

Having a credit card or taking a loan is a commitment that requires a lot of self-control. It is easy to spend borrowed money. It is easy to pay only the minimum payment due. It’s easy to say “yes” to something you don’t have to worry about until the future. But when the future arrives and you’re still in the hole, what can you do?

Getting out of debt requires a coherent and realistic plan that might start with a little prioritizing. Credit.com recommends making a detailed list of all of your debts, a list that includes the total balance, interest rates, the minimum monthly payment, and the three- or five-year pay-off amount that is likely available on your statement. That way, you can compare each debt and evaluate which one is the most pressing based on the interest rate or amount owed.

Consumer expert and blogger Clark Howard advises that in addition to organizing the debt you owe, you should commit to not accruing new debt if possible. Focus on the debt you currently owe rather than looking for opportunities to get new things that you will have to finance. When you organize your debt, list the smallest first and the largest last. Once you tackle the first, you will gain confidence that you can also tackle what remains, and you will see a clearer picture of when you can be debt-free.

“If we jump high enough, debt can’t reach us!”

One way to avoid having to open new credit lines is to commit to spending cash instead of thinking of your money in terms of credit. Time magazine’s Family Finance writer Kara Brandeisky explains that people who pay in cash are more likely to “feel the pain associated with spending real money,” citing a study that showed consumers are less likely to make luxury impulse buys with credit cards.

Another key part of making a financial plan is to be sure to pay more than the minimum balance each time. Paying the minimum only requires you pay a very small portion of your debt—and then leaves the rest of it in your account to accrue interest. One way to avoid paying a lot of interest is to utilize available balance transfers—most of which offer a promotional period with low or zero percent interest.

“I got a retweet!”

Make a plan with deadlines and set amounts that you are to pay off, and be willing to adjust that plan when necessary. Track your behavior using a chart or taking notes about whether you really did what you said you were going to do, and be honest with yourself. You may want to create a plan, then schedule time to reassess it every month in the beginning, slowing down to every quarter as you progress. That way, you’ll be sure you’re on the right track and you’ll have the added reward of seeing your debt totals go down.

Clark Howard also advised debtors to use any “excess” cash against their debt. Excess or unexpected cash may come from a higher tax return than expected, a rebate, sales of items on eBay, or even selling your diamonds with us. If you have that cash, prevent the debt you already owe from adding up by putting it toward it. You’ll never miss it!

“Yes!! …Also, I’m excited for pumpkin spice lattes.”

Liberating yourself from debt is an achievable goal if you are willing to change the way you think about money and the way you live your life. If you make a pact with yourself that you are going to pay off your debt, then uphold that pact, you can knock the debt train right off the tracks and get things moving in a more positive direction. Eighteen percent of people surveyed by CreditCards.com said they expect to never pay off their debts. But that pessimistic attitude doesn’t have to be yours if you plan properly and act according to plan. So chop up that plastic and get out of the black!